I hope to share with you how India perceives the changing international environment and how we assess its impact on our prospects.

At independence, it was natural that the primary task of India's foreign and security policies was to enable India to begin the process of economic and social transformation that a poor and backward country required.

The immediate objectives were therefore a peaceful environment, strategic space and autonomy, free of entanglement in Cold War conflicts or alliances. Non-alignment, as this policy was called, was the ability to judge issues on their merits and their effect on India's interests, or, as our first prime minister Jawaharlal Nehru used to say, 'enlightened self-interest'.

Six decades later, we face a different world. The end of the Cold War, accelerating processes of globalisation and the salience of trans-national challenges characterise the current global scene. India too has undergone a profound internal change during this period.

Economic growth and modernisation are transforming our society at an unprecedented pace. The impact of technology is being increasingly felt. Movements of goods, services, capital and people connect us more closely than ever to once distant societies.

Our engagement with the global economy is growing rapidly, with trade in goods and services now exceeding $330 billion. Our needs from the world have changed, as has our capability. And this is reflected in how India perceives its own future, its ties with its neighbourhood and its approach to the larger international order.

Today, it is no longer possible for India to envisage security -- internal or international -- in traditional terms. A combination of greater inter-dependence, applications of technology and new vulnerabilities have created challenges that could not have been imagined earlier.

The threat of terrorism, the prospects of pandemics or the damage of cyber crime are manifestations of problems faced by a more industrialised and integrated world. Allow me to illustrate this by looking at India's neighbourhood, at global issues and at the international order.

India's Neighborhood

The first circle of our external security interests is constituted by India's immediate neighbourhood. South Asia has lagged well behind the level of inter-dependence that characterises many other regions, particularly Europe.

From India's perspective, we are acutely conscious that a peaceful periphery is a pre-requisite to sustain our growth and development. The challenge, therefore, is to encourage our neighbours to see the possible gains from a more active engagement.

In the last decade, countries like Bhutan or Sri Lanka who have sought to leverage India's growth to their benefit have benefitted greatly. Our hope is that this will embolden our other neighbours. For its part, India is prepared to take a long-term view of these relationships and to take unilateral steps to put them on a better footing.

The prospects of creating a peaceful periphery are complicated by the reality that each of our neighbours is undergoing its own political and social transformation.

A brief survey would give you a feel for the challenges. The Afghanistan-Pakistan border region currently elicits the greatest concern. The regrouping and resurgence of the Taliban in a swathe of territory west of the Indus on both sides of the Durand Line threatens stability well beyond the area itself.

The last year has seen the emergence of an area of anarchy under terrorist and extremist control west of the Indus. Each local accommodation with the Taliban has made the war on terrorism more disjointed and segmented.

The assumption that there might be "good Taliban" who might be politically accommodated is most dangerous. Al Qaeda and the Taliban are allied with and extend reciprocal support to a host of jihadi groups operating out of Pakistan.

These groups have been responsible for much of the cross-border terrorism directed against India. The London and Madrid train bombings also lead to the same networks.

This is not to underestimate what Afghanistan has achieved. Over 4 million refugees have returned home, elections have been held freely and fairly, and the economy is enjoying double-digit growth. India is making a long-term and heavy investment in Afghanistan for the same reasons as you are.

We cannot afford to see the country once again becoming a cockpit and breeding ground for extremist ideologies and terrorism. India has committed $750 million to Afghan reconstruction and 3,500 Indians are working in Afghanistan. What is essential is to create the security that Afghanistan needs to recover.

The security situation in Afghanistan cannot be addressed without Pakistan's active cooperation. It is our belief that the political stability and economic prosperity of Afghanistan is in the interests of both Pakistan and India.

We have offered to work together with Pakistan for Afghanistan's recovery. Afghanistan can still re-emerge as what Toynbee called a "roundabout" of history, a region where routes converge and radiate, by hosting energy corridors for oil and gas and transit routes between some of the world's great emerging markets. But this would require all of us in the region to work together.

A stable, moderate and prosperous Pakistan at peace with itself and its neighbours is in India's interest. In the last three years, the composite dialogue has greatly improved the atmosphere between India and Pakistan, addressing all issues including Jammu & Kashmir, bilaterally.

For the first time in 60 years, over 4,000 people have been legally permitted to cross the Line of Control. Unfortunately, however, despite a joint anti-terrorism mechanism, more remains to be done by Pakistan to curb cross-border terrorism, which continues with seasonal fluctuations.

For India, it is crucially important that Pakistan fulfill its commitment not to permit any territory under its control to be used to support terrorism in any manner.

Nepal is going through a difficult double transition, building a stable democratic political order while attempting to mainstream the Maoists peacefully. The fundamental decisions on the direction and nature of change lie with the people of Nepal.

India has extended its full support to Nepal in ensuring the success of this process, and will continue to do so.

Another transformation is being attempted in Bangladesh. As a neighbour and friend, India wishes for a democratic, stable and prosperous Bangladesh.

In Sri Lanka conflict, violence and terrorism continue. The recent intensification of armed conflict, which has led to renewed refugee flows to India, is particularly worrying.

As the conflict continues we see the induction of new capabilities. Only dialogue can lead to a sustainable and lasting solution to the conflict acceptable to all sections of Sri Lankan society within the framework of a united Sri Lanka.

Despite the risks that I have outlined, taken as a whole, the subcontinent is moving in a positive direction. It is one of the fastest growing regions of the world, and a free trade area has come into existence (with only Pakistan opting out).

The recent South Asian Association for Regional Cooperation Summit in New Delhi showed that the countries of South Asia see an opportunity for benefit in India's growth and have the will to seize it. The risks and dangers are primarily political and from terrorism.

China is India's largest neighbour. Her rise represents a new opportunity to remake our relations and settle outstanding issues.

There is space enough and opportunity for both countries to grow. The challenge for us both is to translate this understanding into action in a transparent manner taking into account the continuous development of our capabilities.

As we move beyond Southern Asia to India's extended neighbourhood of West Asia, Central Asia, South East Asia and the Indian Ocean region, we see other potential challenges and opportunities.

West Asia is an important source of India's energy needs, an increasingly significant trade partner and home to nearly 4.5 million people of Indian origin. Yet the potential for conflict and continued instability in West Asia is high. Proliferation in North East Asia and west of India are clearly not in India's security interest.

From the broader perspective, we regard our security as lying in a neighborhood of widening concentric circles. It is often said that the logic of geography is unrelenting.

Geography gives India a unique position in the geo-politics of the Asian continent, with our footprint reaching well beyond South Asia and our interests straddling across different sub-categories of Asia -- be it West Asia, East Asia, South-East Asia or Central Asia.

We share one of the longest land borders in the world with China, Central Asia verges on our northern frontiers, we have land and maritime borders with three South East Asian countries, our Andaman and Nicobar islands are just over 100 km from Indonesia, and our exclusive economic zone spans the waters from the Persian Gulf to the Straits of Malacca.

It is clear that a major realignment of forces is taking place in Asia. Besides the emergence of the Indian and Chinese economies, Japan is playing a greater role in regional stability and security.

The key to ensuring long-term stability and security in Asia lies in the collective ability of Asian countries to build mutual economic stakes in each other, and to construct an open regional security architecture, as ARF and other organisations are attempting to do.

At the risk of simplifying, I would say that India's security interests in its neighbouring regions are met by a peaceful South Asia, a stable West Asia, a dynamic ASEAN and a developing and stable Central Asia.

Significantly, our current engagement in security affairs in Asia in expanding circles starting with the immediate neighbourhood parallels our growing economic interaction with the same region from Sri Lanka in South Asia to ASEAN and further East to Japan.

Global Issues

Despite some political turbulence around India, the real factors of risk that threaten systemic stability come from larger, global issues like terrorism and proliferation of weapons of mass destruction. (Hence the significance of Pakistan as these issues enter our region from Pakistan.)

As the world globalises, technology ensures that our threats also globalise. Our security planning must therefore increasingly deal with cross-cutting or trans-national issues: energy security, the environment, non-proliferation of weapons of mass destruction, and, most significantly, terrorism. It seems apparent that no single country can deal with these issues alone and that they require global solutions which involve all the major powers.

Some trans-boundary issues have the greatest part of their solutions in our immediate and extended neighborhood. These include food security and water issues. Our effort is to create a web of cooperative partnerships in areas such as water and flood control. There are others such as energy security and climate change which are global in their nature and impact.

For instance, let me give you an idea of the challenge that India faces in seeking energy security. The average consumption of electricity per capita each year in India is currently only 550 kwH against a global average of 2430 kwH, a US average of 13070 kwH and a Chinese figure of 1380 kwH.

At a projected growth rate of 8 per cent a year through 2031-32, the minimum necessary to eradicate poverty, India needs to increase its primary energy supply by 3 to 4 times, and its electricity generation capacity by 5 to 6 times current levels.

By 2031-2, power generation capacity must increase to nearly 800,000 Mwe from the current capacity of 160,000 Mwe. And more than half of this will still have to come from coal. I must add here that even though we have been growing by over 8 per cent there has been effective decoupling of our GDP growth from energy consumption and we have not followed the fuel fuelled growth seen in the OCED.

Since earlier this century's most hydrocarbon exports from the Gulf region have begun to flow eastwards. The major consumers and major producers of energy are all in Asia.

There are fears of a competitive scramble, spiraling prices and plummeting growth. The debate on climate change has acquired starker dimensions in this background.

For India clean, convenient and affordable energy is a critical necessity for improving the lives of our people. This would imply massive imports of oil and even coal, which is not as abundant as was believed.

Can India afford to follow this path? What are the other options available given that we are short of energy resources like oil, gas and uranium? What does each of these options entail? In our discussions with the UK, European Union and the US on energy security, we have come to the conclusion that international cooperation in civil nuclear energy can be a significant addition to our own efforts.

This is the fundamental premise behind the India-US understanding on civil nuclear energy cooperation. We would need to build other partnerships as well, on technology cooperation in renewable and efficient use of energy, and on cooperative development of energy supply chains with new suppliers in West Africa, Central Asia and Latin America.

The EU in particular is a valued partner in our energy dialogue. India is an active participant in the International Thermonuclear Energy Research project to develop fusion energy as a future source of clean and cheap energy sponsored by the EU.

Linked to energy security is the issue of global warming and climate change. The international community already has an instrument to deal with the challenge of climate change in the form of the painstakingly negotiated Kyoto Protocol.

More than 50 pc of GHG emissions are currently from OECD countries. India with 17 pc of the world's population accounts for only 4 pc of such emissions. And yet the adverse effects of global warming caused by accumulated and continued high emissions by industrial countries will largely be felt by developing countries.

These unsustainable patterns of consumption and production must be tackled on an urgent basis. It is imperative that the developed countries in the Kyoto Protocol urgently commit themselves to truly higher levels of GHG reductions as compared to the first commitment period and conclude these negotiations quickly. This will also spur the enlargement of the carbon market and give a fillip to private sector involvement in clean technologies and investment.

We all need additional paradigms for tackling climate change comprehensively. These include access to clean technologies by developing countries both through new R&D efforts, including collaborative R&D focusing on the resource endowments of developing countries, and by addressing the IPR issue.

The IPR issue has been dealt with some success in the case of HIV/AIDS. A similar effort is required for clean technologies that would balance the rewards for the innovators with the common good of humankind.

We have recently begun hearing of linkage between climate change and international peace and security. Developed countries reducing their GHG emissions and energy consumption will considerably reduce such threats through a reduction in the need for privileged access to energy markets.

Nothing in the GHG profile of the developing countries even remotely reflects a threat to international peace and security though their taking on GHG mitigation targets will adversely affect their development.

To meet the twin challenges of energy security and climate change India and the EU have an energy panel which focuses on collaboration in clean coal technologies, nuclear energy, energy efficiency and the petroleum sector. There is also a separate India-EU working group under the joint commission dealing with environmental issues.

As for the threat from weapons of mass destruction to international security, we believe that general and complete disarmament including nuclear disarmament must remain on the international agenda.

India's status as a nuclear weapon state does not diminish its commitment to the objective of a nuclear weapon-free world.

Aspiring for a non-violent world order, through global, verifiable and non-discriminatory nuclear disarmament continues to be an important plank of our nuclear policy that is characterised by restraint, responsibility, transparency, predictability and a defensive orientation.

We maintain our voluntary moratorium on tests, are ready to engage in negotiations in a non-discriminatory Fissile Material Cut-off Treaty, and we enforce strict and comprehensive export controls, which have now been harmonised with those of the Nuclear Suppliers Group and the Missile Technology Control Regime.

We have scrupulously not transferred enrichment and reprocessing technologies to countries that do not have them, and have supported international efforts to halt their spread.

Recent events have shown that a new global consensus on non-proliferation is required, based on an equal partnership of responsible States. As a responsible nuclear power with impeccable credentials on non-proliferation, we are ready to be a partner against proliferation, working closely to create a new consensus on which to move forward.

Many of the challenges I have described -- terrorism, peace and stability in our extended neighbourhood, proliferation of weapons of mass destruction, energy security and environment -- are integral to our discussions with the major powers, and the EU.

The engagement between India and the EU collectively, as also with its member states, notably France, Germany and the UK, is intensifying on a number of strategic issues.

With shared democratic values and as multi-ethnic plural societies, India hopes to be able to draw on the emerging cohesiveness of the European perspective on major strategic issues. India and the EU are natural partners and factors of stability in the present world order, and the UK is India's natural bridge to the EU.

In sum, in our approach to emerging and larger security issues worldwide, as new trans-national threats emerge, fueled in part by the informative age and globalisation, a new mix of players will be central to achieving our goals.

In an environment where most conflicts will be "low intensity" regional affairs, the real challenge will be "winning the peace," and marshalling and deploying soft-power assets will be as important as "hard power" assets.

Beyond regional instabilities and conflicts caused by failed or failing States, the greater problems are associated with the new set of trans-national threats that grow in importance proportionately to the progress of the informative age and globalisation trends that fuel them just as they drive economic expansion.

Foremost among these is the terrorist threat, from a new generation of technologically empowered, globally mobile non-state actors.

The International Order

This tour d'horizon from an Indian point of view suggests that we should judge the efficacy or otherwise of the international order by its success in dealing with terrorism, disarmament and non-proliferation, energy security and the environment.

Each of these must be successfully addressed if India is to have the peace and security she seeks for her own transformation.

Unfortunately, an honest appraisal suggests that the present global order has not done very well when judged by this standard. It is because the old order is not delivering that we are compelled to seek ad hoc solutions like "coalitions of the willing" to contemporary security problems.

It seems to us that global security issues will need multilateral solutions that are the result of a broad participatory process. In seeking an enabling global political and economic order, India has consciously sought to strengthen multilateral institutions and mechanisms, particularly the United Nations.

More than 90,000 Indian troops and policemen have participated in 43 UN peacekeeping operations.

If our international institutions are not dealing successfully with the challenges of today, one reason is the fact that they no longer reflect current or emerging realities of power.

The United Nations has a structure which is completely outdated in terms of the emerging global landscape. We are committed to the comprehensive reform of the United Nations, including the Security Council, which should reflect contemporary realities in its composition.

To conclude, there is a need to build new international consensus to deal with non-proliferation and energy security. At the same time, we should make truly effective and comprehensive the existing regimes for climate change and to counter terrorism.

India is ready to work to build an enabling global order, based on equity and reflecting emerging realities. We look to Britain and the EU as partners in the shaping of the new approaches that a changing world requires.

Foreign Secretary Shiv Shankar Menon gave this speech on 'India and International Security' at the International Institute of Strategic Studies, London, on May 3